“Best Life Insurance Companies…”

March 1, 2023 by Sheryl J. Moore

This is weird.

I saw that USA TODAY published an “article” on the “Best life insurance companies of 2023.”

They have my attention.

The third sentence of this piece says, “we analyzed 15 of the leading life insurance companies” in the assessment.

Leading life insurance companies, based on what?

Later on, another reference, “life insurance experts evaluated 25 of the top life insurance companies that offer coverage in the United States.”

This seems to conflict with the previous admission, but again- based on what? I work with 65 different life insurance companies alone on Wink, Inc.‘s LifeSpecs tool. So, how is the universe of life insurance companies whittled-down to 25 or 15?

It is not accurate to say of Indexed Universal Life (IUL) that “it also leaves you vulnerable to losses that can wipe out your cash value.”

Interesting. “Each life insurance company included in our evaluation had the opportunity to earn up to 100 points, based on the following factors: “

Here is what I think of the factors:

1. Term life insurance rates: 35 points. (So, if a company doesn’t offer term, they are penalized immensely. I didn’t realize having term insurance products was a criteria for being “best?” Interestingly, their #1 company has VERY competitive term rates.)

2. Cost competitiveness of cash value policies: 15 points. (No disclosure on how they ‘determine the competitiveness.” Interesting.)

3. Historical performance: 15 points. (This is misleading- there is nothing historical about it. They say this metric looks at, “cash growth potential compared to others.” Let the illustration wars begin!)

4. Complaints: 10 points. (I give them credit for using this metric, I’ve used the NAIC complaint database myself. While it is the only resource of this data, I cannot tell you how many companies get complaints on products that they don’t even sell. i.e. Northwestern Mutual getting IUL complaints)

5. Reliability of policy illustrations: 10 points. (Do the authors even understand what illustrations are? They say that they, “evaluated the accuracy of each insurer’s policy illustration to determine which companies provided the most reliable outlooks.” How can you determine accuracy, when an illustration is projecting potential FUTURE values?!?)

6. Financial strength: 5 points. (Yes, the fact that the guarantees are only as good as the claims-paying ability of the insurer is worth a whopping 5 points.)

7. Access to cash value: 5 points. (So, everyone pretty much got a “freebie” five points, if they offered permanent insurance.)

8. Term life conversion availability: 5 points. (Again, we are penalizing those that don’t sell term.)

Don’t worry- you can have confidence in how USA Today advises you on life insurance. After all, their “insurance experts follow strict editorial guidelines to ensure fairness and unbiased reviews.”

I am just floored to see a widely-distributed newspaper giving advice on life insurance.

How about you? -sjm